I attended a doctoral program and was completing it in 3 to 4 years. I got a life-threatening sickness that set me back several years. When nearing my dissertation I was dismissed. I was told that I was let go because I had cancer. I never wanted to return to that school again, but not having completed my work has caused me great heartache and I am not able to pursue the career I desired. Is it at all possible to complete the degree elsewhere?
I think you should try to fight it diplomatically but legally with the school. It doesn't seem fair or legal. It would be nearly impossible to continue in another institution unless you have relationships and also the reputation of the former school is considerably higher, which you wouldn't want to do anyway.
Depends if really the time you were away was strictly due to sickness. If you took several years more afterwards it is unlikely for you to win. Doctoral programs routinely turn away people who started, left, went to the real world, didn't like it, and want to return. They believe that somewhat freshness of knowledge and being current in the topics is important. Also they have some strange ideas about academic virginity that you want to take into account.